What Do Your Tax Docs Tell Lenders?

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November 2019
What Do Your Tax Docs Tell Lenders?
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Thinking of Re??nancing? Before a Mortgage Lender
will issue you a Mortgage Loan, they need to get
an idea of what you can afford. One of the most
telling ways for a Lender to get a glimpse of
your affordability is by going over the last
year or two (depending on the employment or loan
type) of Tax Returns as well as other requested
Financial Documents (These may include bank
statements, pay stubs and other various
documents.) This is otherwise known as the 2
Year Threshold. Mortgage Lenders will be
looking over your debt-to-income ratio (DTI).
The equation is as follows Monthly Debt Payments
(Including Future Monthly Mortgage Payments,
Taxes, Insurance, and Mortgage Insurance)
Monthly Income (Before Taxes) Your Debt-to-
Income Ratio (DTI) The lower your Debt-to-Income,
the greater chances you have at
Re??nancing. Why do Lenders need my tax
returns? Tax Returns can give Mortgage Lenders an
idea of your income history whether or not you
have a steady stable stream of incoming
??owing-in and how much you make can determine
how much home you can afford. Also, showing
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your on-top of paying your taxes can give you a
standing ovation inside the responsibility
arena. What kind of Income Documents will a
Mortgage Lender request? In general, borrowers
are usually asked for the following 1-2 years
of personal tax returns 1-2 years of business tax
returns (if you own a business) 1-2 years of
W-2s or 1099s The requested paperwork can also
vary depending on your work situation. For
example, If youre a freelancer, Mortgage
Lenders will typically ask you for a copy of your
PL (Pro??ts Losses). Statement E is needed if
you have any real estate investments. To get a
better idea of how much home you can afford,
check out our Mortgage Affordability Calculator
click here. For a detailed breakdown of interest
rates and monthly payments, click here to get
started. If you would prefer to speak with one of
our Home Loan Experts, please feel free to
contact us at 888-562-2611 or info_at_getarate.com
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